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Mid-Cap ETFs: Growth And Stability At A Better Value

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Mid-cap stocks – those with market capitalization between $2 billion to $10 billion – are less known than large and small cap stocks, but they can provide profitable investments, according to investment experts.

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Quality, stability and value are typically associated with large cap stocks. Growth is usually associated with small-cap stocks. Mid-cap stocks tend to be ignored, despite the fact that such stocks have been among the best-performing equity groups since the beginning of the 21st Century, to Todd Shriber, ETF editor at Benzinga, writing in Investopedia.

Mid-cap companies are also more diversified than their small-cap peers, allowing many mid-sized companies to generate more consistent revenue and cash flow and provide more stable stock prices, according to Tom Lydon, writing in ETF Trends. Additionally, the mid-caps are not so big that their size would slow down growth.

The mid-caps segment outperformed large-caps, but with less volatility than small caps, Lydon added. The returns of mid-caps have also beaten those of small-caps during the trailing three-, five-, and 10-year periods, with less volatility.

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In addition, mid-cap stocks spare investors the burden of picking stocks while providing the advantages of dividends.

What Makes A Mid-Cap Stock?

While market capitalization is based on market price, a stock priced over $10 is not necessarily a mid-cap stock, according to Investopedia. Analysts multiply the current market price by the current number of outstanding shares to calculate market capitalization.

If company A has 10 billion outstanding shares at $1, its market capitalization is $10 billion. If company B has 1 billion outstanding shares at a $5 price, its market capitalization is $5 billion. While company A has a lower stock price, its market capitalization is higher. Company B may have a higher stock price, but it has a tenth of the outstanding shares.

What Mid-Caps Offer Investors

Most financial advisors suggest a mix of low-, mid- and large-cap stocks to have a diversified portfolio, but some investors believe mid-cap stocks diversify the risk in addition to diversifying the portfolio.

Small-cap stocks, which offer the most growth, have the most risk. Large-cap stocks, which are the most stable, offer lower growth. Mid-cap stocks offer a hybrid of small-cap and large-cap stocks, a balance of stability and growth.

What To Look For

The most important thing to consider when searching for mid-cap stocks is potential for growth, according to Wall Street Survivor. Investors should seek companies that can grow faster than their larger peers in the industry, thereby gaining market share.

The company should be a largely undiscovered stock, giving it a cheaper valuation. Mid-caps that have low leverage and higher growth profiles that the market has not realized are good choices.

Investors in mid-cap ETFs must be sure the ETF they choose is not a misrepresented large-cap fund, Shriber noted.

A Model Mid-Cap Stock

Shriber observed the dividend yield for the underlying index for WisdomTree MidCap Dividend Fund (DON) is just under 3%, which surpasses the S&P 500 or 10-year Treasuries corresponding yields.

DON also compares favorably against S&P MidCap 400 Index, Shriber noted, which yields just below 1.3%. In addition, the weighted average market value of its holdings is around $5.2 billion, $16 billion under DON member firms’ weighted average market value.

DON delivers risk-adjusted returns, which is what matters, Shriber noted. Over the past three years, DON is 43.7% higher, versus the S&P MidCAP 400’s 35% gain. In addition, DON has been roughly 10% less volatile compared to the S&P MidCap 400.

Since March 2009, when the current bull market began, DON rose more than five-fold, surpassing the S&P MidCap 400.

Weighting Matters

Up 3.4% in 2017 and posting record highs, DON distinguishes itself in that more than 400 of its holdings are weighted to reflect the proportionate share of aggregate cash dividends that each component company is expected to deliver in the coming year. This projection is based on the most recently declared dividend per share.

DON’s weighted average market value holdings at the end of the first quarter were $7.1 billion, which is less than half of the Vanguard Mid-Cap Growth ETF’s weighted average market value. DON’s weighted average market value was roughly $1.8 billion over the S&P MidCap 400 Index.

DON’s 400 holdings are weighted by dividends, compared to mid-caps weighted by market value. Weighting by market value provides a large-cap fund in disguise as prices increase, Shriber noted.

The WisdomTree MidCap Dividend Index, DON’s underlying index, in the past six years has beaten the CRSP index by more than 35%.

WisdomTree noted that the 35% indicates the selection of the mid-cap is critical, rather than which mid-cap indexes will perform best over the next six years, which is not known at the present time.

While many indexes are named “mid-cap,” there is a significant difference in performance.
21.3% of the DON fund’s weight is allocated to consumer discretionary names. The CRSP index, by contrast, allocates less than 24% of its weight to consumer sectors.

DON allocates 29.1% to industrial and real estate names to improve its dividend yield to 3%, which is above average for mid-cap ETFs.

With $2.8 billion in net assets, DON generates income in a low-interest rate environment within mid-cap stocks, making it a category creator, according to Shriber. Dividends previously were considered a large-cap equity phenomenon.

A Compelling Multi-Factor Idea

Among mid-cap ETFs, Lydon of ETF Trends noted the John Hancock Multifactor Mid Cap ETF has a compelling multi-factor idea.

Hancock ETFs indexes use market-capitalization adjustments to increase the weights of smaller companies within the eligible universe and lessen the weights of larger names. The methodology indicates that the ETFs have a more equal-weight tilt with more exposure to smaller companies than traditional market-cap weighted index funds.

The Hancock ETF allocates 34% of its combined weight to industrial and technology stocks while the consumer and financial services discretionary sectors combine for 29% of the ETF’s weight. None of the 678 holdings command weights of more than 0.55%.

Hancock was among a small number of ETFs to hit record highs last week, bringing its year-to-date gain to just over 7%. The ETF debuted in September 2015 and now has more than $170 million in assets.

Investors currently have an opportunity to take advantage of the mid-cap ETFs before the benefits become more widely known.

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ETFs

Three Country Exchange Traded Funds Offer Potential For Investors

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Country exchange traded funds (ETFs) that invest in specific countries’ stocks offer a way to gain exposure to foreign equities, according to Investopedia. The funds can include alternative investments, foreign currencies and commodities.

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Three such country ETFs have demonstrated strong uptrend over a long term but have experienced recent pullbacks, providing an opportunity to get in before the next upside wave begins. This obviously assumes the uptrend will continue, but in these cases, signs of weakness have been small.

iShares MSCI Taiwan Capped ETF (EWT)

Source: Investopedia

iShares MSCI Taiwan Capped ETF (EWT) has been steadily rising all year. In June, shares hit a 52-week high, and shares were up roughly 38.7% from their 52-week low price of $26.38 per share.

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After hitting a high of $37.49 on Aug. 8, the price fell near $36. If the price rallies above this mark, traders should consider a purchase. At the same time, if the price falls in the short term, traders could consider buying between $36 and $35.60.

The next upside target is $37.75 – the top of the channel. Traders could place a stop/loss order under the most recent low swing just prior to entry. If, for example, the price rises over $36.50, the most recent swing low would be $35.96. If it keeps falling in the short term, the most recent swing low would be $35.30.

EWT invests its assets in 92 securities, focusing on the Taiwanese equity market. However, with more than a fifth of the total exposure on a single company, Taiwan Semiconductor, EWT has a concentration risk.

Hon Hai Precision Industry takes up the second position in the portfolio with a 10.11% share. The rest of the stocks do not comprise more than 2.78% of the fund.

EWT relies strongly on information technology (57.8%), financials (16.8%) and materials (9.4%). It has an expense ratio of 64 basis points

Business optimism remains high in Asia. This, combined with a gain in tech shares, created a positive situation for the fund. Bullishness on the fundamentals of Hon Hai Precision Industry and Taiwan Semiconductor sent Taiwan shares to a 27-year high.

Wisdom Tree India Earnings Fund (EPI)

Source: Investopedia

Wisdom Tree India Earnings Fund has experienced a strong uptrend since early 2017. After reaching a $26.90 high on Aug. 7, the price fell back to the rising trendline at $25.30. The price has already moved from the trendline area, trading at $26.10 on Aug. 16.

Patience is needed in allowing the price to move closer to the trendline before making a purchase. Should the price fall near $25, a stop/loss could be put below $24.20. The upside target is $27.30, which is above the former high.

EPI, with $1.7 billion, is more than nine years old and one of the biggest U.S.-listed India ETFs. EPI year to date is up 26.3%, an advantage of 620 basis points above the MSCI Emerging Markets Index.

India’s economic potential as the world’s biggest democracy and second largest country by population after China has long been heralded. That potential, as measured by EPI, will come to fruition and could continue to do so for several years to come.

Ridham Desai, head of research for Indian equities at Morgan Stanley, said the economic and earnings growth cycle is improving and should support earnings per share growth of 20% per year for the next five years.

During 2003 to 2008, the last major growth cycle, earnings compounded at 39% per year, according to the fund. EPI only holds profitable Indian companies. Its underlying index weights components are based on earnings before its index rebalance, which is a unique strategy among legacy India ETFs.

Historically, Indian stocks are volatile than broader emerging markets benchmarks. EPI, however, has a track record of superior risk adjusted returns. In the last three years, EPI has been 200 basis points more volatile than the MSCI Emerging Markets Index. The ETF is nonetheless up 17.9% over that period compared to 1.2% for the MSCI index.

iShares MSCI Mexico Capped ETF (EWW)

Source: Investopedia

iShares MSCI Mexico pulled back to its rising trendline in August since reaching a $57.72 high two weeks prior. The trendline intersects slightly below $56, where the price stalled in trading between Aug. 9 and Aug. 11.

By Aug. 16, the price traded at $57.11. It will take patience to see if another purchasing opportunity arrives near $56. Whether or not another opportunity occurs, upside target is $59 to $59.50. A stop/loss could be put beneath the recent low of $55.47, but it might make sense to give the trade more room should the price fall back to the entry point and wiggles for a week or two, which often happens.

In addition to concerns about the impact of the U.S. presidency on Mexican stocks, EWW flailed last year because the peso fell. However, EWW is not a currency-hedged ETF, meaning there is no mechanism by which the ETF can benefit from the dollar strengthening against the peso.

While Mexico’s economy is largely export driven, because EWW not currency hedged, a falling peso does not benefit investors in this ETF. With the peso now one of this year’s best performing emerging markets currencies, EWW is benefiting.

Traders see more upside to the Mexican peso. Bloomberg reported that the U.S. Commodity Futures Trading Commission reported professional traders are bullish on the peso for the first time since May. There was a fund dedicated to the peso at one time, but it was shuttered years ago, leaving EWW as the most direct play on the Mexican currency.

EWW often trades at a premium to broader emerging market benchmarks. It holds 62 stocks. More than 45 percent of the fund’s lineup is in consumer staples and financial services.

Some of the bullishness this year can be credited to financial markets realizing that Trump is the U.S. president and despite his campaign rhetoric aimed at Mexico, the two countries’ relationship is mostly unchanged at the moment.

EWW and Mexican stocks are not fully in the clear. A Trump effort to renegotiate the North American Free Trade Agreement poses a possible risk. However, any trade talks are likely to include a push by Mexico to keep the peso stable.

These three country ETFs have exhibited strong uptrends, and there is no significant evidence to suggest the uptrends are over yet. Hence, the pullbacks present buying opportunities. When the price falls back to a trendline, it is a potential trade area, but traders need to be sure the possible reward outweighs the risk and they aren’t attempting to catch a “falling knife.”

EPI, for instance, experienced a hefty fall during the pullback, which is cause for concern. But if the price drops again and stabilizes near the trendline, the selling could lose momentum. This is positive for the bulls. In all trading, one can only put the odds in their favor and risk a small portion of account capital on any single trade.

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Biotech And Industrial Metals Top Penny Stocks To Watch For August

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Leading market benchmarks hit new highs in July, generating interest in small-cap stocks and low-priced securities for August, according to the Investopedia penny stocks to watch for August.

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Suffering sectors like industrial metals and brick-and-mortar retailers also perked up, driving swing traders and bottom feeders into the market. Such developments bode well for penny stocks in the near-term, even though traders have to recognize higher than average risk.

Biotech stocks performed well during the month as major sector funds broke out of basing patterns set in 2015. The strength of biotechs signals the start of secular uptrends that should support rallies at all capitalization levels in the next few months.

Four of this month’s stocks return from the previous two months while the balance are newcomers.

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1. ImmunoGen Inc. (IMGN)

Source: Investopedia

ImmunoGen, Inc. has grown by more than 70% since it joined the penny stock watch list in June, raising odds for double digit growth.

Immunogen, a provider of antibody-drug conjugates for the treatment of cancer, leads the top penny stocks for the second straight month after joining the list in June as the number four top stock to watch.

The stock posted a 12-year high at $20.25 in 2013 and sold off to $5.34 in December 2014. A recovery in 2015 stalled less than a point below the prior peak, creating a decline that continued into an 18-year low at $1.51 in November 2016.

The stock reached a 14-month high above $8.00 in early July. A mid-month pullback dropped the stock into intermediate support at the 50-day EMA, creating a healthy bounce that could now test the prior high, pushing into double digits.

ImmunoGen creates targeted cancer therapeutics. The company’s candidate, mirvetuximab soravtansine, is in a Phase 3 trial for an ovarian cancer, and is in Phase 1b/2 testing in combination regimens for an earlier-stage disease.

The technology is used in Roche’s Kadcyla, in three other clinical-stage ImmunoGen product candidates, and in programs in development by Amgen, Bayer, Biotest, CytomX, Lilly, Novartis, Sanofi and Takeda.

2. RADA Electronic Industries, Ltd. (RADA)

Source: Investopedia

RADA Electronic Industries, Ltd. (RADA), a defense electronics system of advanced electronic systems for airborne and land applications, rose from number 7 in July’s top penny stocks to watch to number two in August.

The stock fell into a multi-decade decline after it joined Nasdaq in the 1990s. It ground out a series of lower highs and lows through January 2016’s all-time 54-cent low. The stock spent 16 months moving sideways in a narrow basing pattern before turning higher in May 2017 and rallying back to 2016 resistance at $1.78. The bullish activity completed a cup and handle breakout pattern that could point to a fast rally into the August 2015 gap between $3.70 and $2.50.

The stock continues to gain strength, targeting the August 2015 gap at $4.24

Revenues totaled $4.7 million in the 2017 first quarter, up 91% compared to revenues of $2.5 million in the first quarter of 2016.

Gross profit totaled $1.7 million in the first 2017 quarter of 2017, a gross margin of 35.7%, compared to gross profit of $6,000 (gross margin of 0.2%) in the 2016 first quarter.

Operating income was $0.4 million in the first 2017 quarter compared to an operating loss of $1 million in the 2016 first quarter.

Net income attributable to RADA’s shareholders in the 2017 first quarter was $0.4 million, $0.02 per share, versus a net loss of $1.8 million, or $0.23 per share, in the 2016 first quarter.

3. 22nd Century Group, Inc. (XXII)

Source: Investopedia

22nd Century Group, Inc., a plant biotechnology company that is a provider of tobacco harm reduction and development of proprietary hemp/cannabis strains, rose from the number five spot in July’s top penny stocks to watch to number three in August.

The stock broke out above multi-year resistance near $1.50 in 2013, rallying to a record high a few months later at $6.36. It then began a persistent decline through August 2015 before finding support at 56 cents, followed by a bounce to $1.75.

The stock traded within those boundaries for 22-months, bouncing at support three times and reversing at resistance in equal measure. The price returned to that level a fourth time, improving odds for a breakout that could double the price in the year’s second half.

The stock found support near 70 cents in the second half of the year, testing that level three times ahead of a March 2017 uptick that has now reached ranged resistance. A breakout over $2 should draw strong buying interest favoring a high percentage rally back to its 3-year high.

The stock joined the Russell Microcap Index two months ago, when FTSE Russell reconstituted its U.S. and global equity indexes.

Membership in the Russell Microcap Index signifies automatic inclusion in the value style indexes. FTSE Russell determines membership for its Russell indexes primarily by objective, market-capitalization rankings and style attributes.

22nd Century Group focuses on genetic engineering and plant breeding that allows the increase or decrease of nicotine levels in tobacco plants and cannabinoids levels in cannabis plants. Its primary goal for tobacco is to lessen the harm caused by smoking. The primary goal for cannabis is to develop proprietary hemp/cannabis strains for new medicines and agricultural crops.

4. Ballard Power Systems, Inc. (BLDP)

Source: Investopedia

Ballard Power Systems, Inc. (BLDP), a provider of clean energy products that reduce customer costs and risks, and helps customers solve challenges in their fuel cell programs, rose from the number 10 spot in the July penny stocks to watch to the number four spot in August.

The stock reached an all-time high at $144.95 in 2000 before falling for more than 12 years, reaching an all-time low at 56 cents. A 2013 uptrend continued through 2014, reaching an 8-year high at $8.38, followed by a correction that returned to 2015 resistance at $3.10.

The recovery wave reached new resistance in April 2017, generating a 3-month symmetrical triangle pattern that could yield an uptrend into the prior high.

Total revenue was $22.7 million in the last quarter, an increase of 39% from growth in both power products and technology solutions.

Gross margin was 42% in the quarter, an improvement of 22 points due to a shift in product mix toward higher margin technology solutions and a heavy duty motive for the China market, including the establishment of a production line in Yunfu, China for the manufacture and assembly of FCvelocity-9SSL fuel cell stacks.

Cash operating costs were $10 million in the quarter, a 6% increase due to higher research and product development expenditures as well as a stronger Canadian dollar relative to the U.S. dollar, since a significant amount of cost is denominated in Canadian dollars.

Low-priced biotech stocks have risen following a long slumber, with steady buying interest likely to continue. This group should offer a variety of profitable penny stock plays during the quiet summer trading season, while low-priced stocks in other sectors move into narrow trading ranges.

5. Trilogy Metals, Inc. (TMQ)

Source: Investopedia

Trilogy Metals Inc., which engages in the development and exploration of mineral properties, joins the top penny stocks to watch list this month at number 5. The Vancouver, Canada-based company went public on the U.S. exchanges in April 2012 at $3.20, beginning an immediate downtrend to an all-time low at 15 cents in January 2016. A recovery wave mounted the 200-day EMA at 60 cents that stalled three months later, yielding a narrow basing pattern into a July 2017 recovery that has reached a 2-year high at $1.22.

A pullback to new support in the 80- to 85-cent price range should mark a low-risk buying opportunity, as the upside that could reach $2.

Trilogy Metals Inc. reported a strong working capital position of $20.1 million in the second quarter, with cash on hand of $14.5 million.

For the three months ending May 31, 2017, the company reported a net loss of $2.4 million compared to a net loss of $1.6 million for the corresponding period in 2016. This variance was primarily due to the size of the field programs at the Upper Kobuk Mineral Projects in 2017 as well as the timing of the program.

An increase of $840,000 of mineral property expenses occurred during the three months ended May 31, 2017 compared to the three months ended May 31, 2016. In 2017, the field program at Arctic and Bornite began with drilling by early June compared to 2016 where the field program kicked off in early July. This earlier start resulted in an increased mineral property expense during the second quarter of 2017. Additionally, an increased level of ongoing technical studies was occurring during the three months ended May 31, 2017 compared to the corresponding period in 2016.

The company announced a financial partnership with South32 Limited for an option to form a 50/50 joint venture for a minimum investment of $150 million. South32 is required to fund a minimum of $10 million per year for up to three years to keep the option in good standing. The first $10 million has been advanced to the company and will be spent on a 12,000-meter exploration drill program at the Bornite deposit, which is already underway.

6. Antares Pharma, Inc. (ATRS)

Source: Investopedia

Antares Pharma, Inc., which focuses on self-administered parenteral pharmaceutical products, caught fire after suffering an all-time low at 29 cents in January 2009, then delivering a strong uptrend continuing into the July 2012 all-time high at $5.58. The stock then fell in multiple selling waves that ended at a 6-year low in March 2016.

The subsequent recovery has now completed a round trip into the April 2015 high, retracing half of the multi-year decline. The price has consolidated above $3 for the past three months, establishing the final stage of a 2-year cup and handle pattern targeting the multi-year high.

The company recently reported operating and financial results for the second quarter ended June 30, 2017. The company reported revenue of $13.4 million and a net loss per share of $0.02 for the three months ended June 30, 2017.

Revenue for the three months ending June 30, 2017 was $13.4 million, compared to $12.2 million for the comparable period in 2016. For the six months ended June 30, 2017, total revenue was $25.4 million, versus total revenue of $24.5 million for the six months ended June 30, 2016.

Product sales were $7.3 million for the three months ended June 30, 2017, compared to $8.7 million for the comparable period in 2016, totaling $17.4 million for the six months ended June 30, 2017 compared to $19.5 million in the same period of 2016.

The decrease for the period was primarily driven by a reduction in sales of pre-launch auto injector devices for use with Teva’s generic epinephrine product and reduced sumatriptan product shipments to Teva partially offset by increased sales of OTREXUP.

The company also completed a non-dilutive, 5-year debt financing with Hercules Capital, providing Antares the ability to draw up to $35 million, with the first tranche of $25 million funded upon execution of the agreement.

7. Corindus Vascular Robotics, Inc. (CVRS)

Source: Investopedia

Corindus Vascular Robotics, Inc. topped out near $4.60 in 2015 and began a steep decline in January 2017 when it posted a multi-year low at 40 cents. The stock rebounded on strong volume one month later, marking an uptrend that reached an 18-month high at $2.25 in early July. The stock has been consolidating at new support for the last three weeks, settling on the 50-day EMA while its on-balance volume holds near the rally high. The bullish configuration favors continuing upside that could reach 2015 resistance at $3.

Second quarter revenue was $2.3 million compared to $0.5 million for the same period in the prior year. The increase is due mainly to CorPath GRX Systems and capital upgrade sales.

The company installed three new CorPath GRX Systems in the second quarter, increasing the installed base to 16 systems and the total installed base to 51 systems. The installed base of 16 systems accounted for almost 90% of all CorPath cassettes shipped for revenue in the second quarter.

Gross profit was $58,000 for the second quarter, compared to a loss of $0.6 million for the second quarter of 2016. The cost of revenues for the second quarter continued to include the effect of under-utilization of production facilities as well as the cost of CorPath GRX system upgrades installed pursuant to contractual service arrangements with no corresponding revenue in the period.

Selling, general and administrative expenses were $5.9 million, compared to $4.4 million in the second quarter of 2016. The increase is primarily due to higher compensation and travel expenses associated with incremental sales headcount, investment in medical education and international sales initiatives, and incremental non-cash stock-based compensation expense related to the CEO and commercial leadership transitions during 2016.

8. Medical Transcription Billing Corp. (MTBC)

Source: Investopedia

Medical Transcription Billing Corp., a healthcare information technology company that provides proprietary web-based solutions, together with related business services, to healthcare providers practicing in ambulatory care settings, went public at $4.28 in July 2014 and entered a downtrend that continued to the April 2017 all-time low at 29 cents. The stock recovered two sessions later in reaction to positive sales news and topped out at $3.84 in mid-May.

A subsequent pullback has now since reached support at the 200-day EMA near $1.20, with a rally from this level generating buying signals favoring ongoing upside into the second quarter high.

Revenues for second quarter 2017 were $7.8 million, an increase of 49% versus $5.2 million in the same period last year. The increase was mainly due to the MediGain acquisition.

The second quarter 2017 GAAP net loss was $1.7 million, or 22% of revenue, an improvement of $1 million compared to a net loss of $2.7 million in the first quarter 2017. The GAAP net loss in the second quarter 2017 was mostly a result of non-cash amortization and depreciation expenses of $1.5 million.

The second quarter 2017 GAAP operating loss was $1.4 million, or 18% of revenue, which represents an improvement of $1 million or 43% from the $2.4 million operating loss in the prior quarter.

As of June 30, 2017, the company had $5.8 million in cash and a working capital deficiency of approximately $4.1 million.

The company raised gross proceeds of $2.3 million from a registered direct offering of its common stock priced at the market on May 10, 2017. MTBC issued 1 million registered shares of common stock to a healthcare institutional investor at a purchase price of $2.30 per share. Concurrently in a private placement, MTBC issued warrants to purchase up to 2 million shares of its common stock, with an exercise price of $5 per share, which are exercisable through May 15, 2018, and would deliver potential gross proceeds of up to $10 million if exercised.

In addition, the company raised gross proceeds of $7.4 million from the sale of about 295,000 additional shares of its non-convertible Series A Preferred Stock on June 23, 2017.

9. Intrepid Potash, Inc. (IPI)

Source: Investopedia

Intrepid Potash, Inc., the only U.S. producer of muriate of potash, sold off to 2008 support at $13.80 in 2014. Two years later, the stock began a decline that reached an all-time low at 65 cents in March 2016. The stock rose above $1.50 in June before settling in a sideways pattern ahead of a December 2016 breakout that soon stalled at $3.04.

The stock spent the last eight months consolidating its gains and is now testing the rally high. A breakout could generate an uptrend reaching 200-week EMA resistance between $6 and $8.

Intrepid generated a second quarter net loss of $5.9 million, or $0.05 per share, delivering a first half net loss of $19.6 million, or $0.19 per share. This marked an improvement over the net losses of $13.4 million, or $0.18 per share, and $31.8 million or $0.42 per share, in the second quarter and the first half of 2016, respectively.
Improvements in year-over-year net loss per share were driven in part by a gain in outstanding shares from a March 2017 secondary offering.

Consolidated gross margin advanced to $3.7 million and $0.8 million in the second quarter and the first half of 2017, respectively, against the prior year. Improvements were due to lower cost solar potash production and higher average net realized potash pricing that offset lower average net realized sales prices for the product, Trio.

Cash provided by operating activities rose year-over-year to $9.7 million and $11.5 million for the second quarter and the first half of 2017, respectively. Increased cash flow was due to strong spring demand, increased potash prices, and the elimination of costlier conventionally mined potash from the production profile.

10. Tantech Holdings, Ltd. (TANH)

Source: Investopedia

Tantech Holdings, Ltd., a manufacturer bamboo-based charcoal products for industrial energy applications and household cooking, heating, purification, agricultural and cleaning uses, went public at $6.00 in March 2015 and began an uptrend that topped out at $33.97 five months later. In the next three months, the stock relinquished more than 90% of its value. Bears maintained control into the April 2017 all-time low at $1, followed by a recovery that reached a 10-month high in July.

Pricing has tested resistance at the September 2016 breakdown through the October 2015 low, with a buying surge setting the stage for upside in the $6 range.

For the six months ended December 31, 2016, revenues were $24.88 million and net earnings were $2.77 million, according to a June 2017 financial report.

Gross margins widened from 25.02% to 30.33% compared to the same period last year, with EBITDA operating margins 18.28% compared to 18.64% the prior year. Year-on-year change in operating cash flow was 32.02%, about the same as the change in earnings.

Penny stocks require investors to make some guesses about the future. Very few such stocks have a sufficient track record to indicate they will prosper. At the same time, the stocks on this list are in significant industries and have the potential to be vital players in those industries.

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Bitcoin

Why Investors Should Just Hold Onto Bitcoin and Worry About Bitcoin Cash Later

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On August 1, Bitcoin Cash (BCH), a hard fork proposal led by Chinese bitcoin mining pool ViaBTC, was forked and hours later, ViaBTC mined the first BCH block. BCH, which was initially developed by a bitcoin mining equipment manufacturer, struggled to gain acceptance from the industry, exchanges and businesses. As a result, its market cap has fallen below $5 billion while the bitcoin price has established its new all-time high at $3,163.

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For all bitcoin holders that have had bitcoin on non-custodial wallet platforms have already been credited with BCH. For users on exchanges and custodial platforms, which handle private keys for their clients, each exchange is handling the BCH hard fork differently. Coinbase for instance, the world’s largest wallet platform and the operator of major digital currency exchange GDAX, announced that it will credit BCH to all user accounts by January of 2018.

David Farmer, the director of communications at Coinbase, stated:

“Over the last several days, we’ve examined all of the relevant issues and have decided to work on adding support for bitcoin cash for Coinbase customers. We are planning to have support for bitcoin cash by January 1, 2018, assuming no additional risks emerge during that time. Once supported, customers will be able to withdraw bitcoin cash. We’ll make a determination at a later date about adding trading support. In the meantime, customer bitcoin cash will remain safely stored on Coinbase.”

Many users and investors remain unsatisfied with the decision of Coinbase to credit user accounts with BCH after nearly five months since the initial execution of the BCH hard fork. However, according to bitcoin analysts and experts including Tone Vays and Paxos principal architect Jimmy Song, such precaution is necessary and investors should be extremely careful throughout the process of claiming BCH.

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Vays, a prominent bitcoin trader and well-respected analyst within the cryptocurrency sector, noted that claiming BCH with non-custodial wallet platforms such as hardware wallets, paper wallets and online wallets can impose security risks as they involve private keys of bitcoin wallets. When private keys are exposed, bitcoin can be stolen from users and redirected to external or alternative wallets.

If the Mt. Gox hacking incident is taken for instance, WizSecurity revealed that a hacker working closely with Alexander Vinnick, the owner of now-defunct bitcoin exchange BTC-E, stole the wallet.dat file from the centralized systems of Mt. Gox and like that, $2.21 billion in bitcoin were stolen.

Hence, because the manual claiming process of BCH requires the handling of private keys, investors should instead just hold onto bitcoin, wait for the BCH market to stabilize, more BCH wallets to emerge and then cash out or trade their BCH.

As Vays noted:

“Right now, my backup is pretty secure. I know there is one backup in a Mac that doesn’t turn on, and another back up on a couple of USB thumbdrives. I’m not in a rush to get this bitcoin private key out because right now I know it is safe. The moment I plug this USB drive to some computer, the moment I get it out, the moment I change the wallet.dat file, I bring this bitcoin into the world and that scares me. I’m really keeping my bitcoin private.”

For users and investors that remain unclear and insecure about BCH, all users of bitcoin already have been credited with BCH. The difference between exchanges and non-custodial wallet platforms is that because exchanges control the private keys of users, they control BCH of their users and can decide when to credit them to user accounts. For users on non-custodial wallet platforms, BCH has already been credited.

Another major reason to simply wait until the BCH market stabilizes is that as of current, there exists no legitimate and secure BCH wallet. Thus, when BCH is withdrawn from a wallet or an exchange, there is no alternative BCH wallet that users can utilize apart from exchanges that support BCH/BTC trading to store BCH.

Some leading bitcoin exchanges including U.S.-based Kraken and South Korea’s second largest bitcoin exchange Korbit support BCH/BTC trading and offer wallet services. Trezor, the most popular and widely utilized bitcoin hardware wallet, has also integrated beta BCH wallet for users to withdraw or store their BCH but none of the abovementioned BCH wallets are completely safe as of now.

To sum up, for investors and traders of bitcoin, it will be safer to simply hold onto BCH and wait until the Bitcoin Cash market stabilizes.

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